SAMPLE RFP FOR CASH ALLOCATION AUTOMATION

Essential Steps on The Road To Digital Transformation

A report by Capgemini states that 46% of the organisations have fully/partially automated their Order to Cash processes and more than 79% C-suite execs have declared digital transformation as one of their primary focus areas in the next two years. With RPA and AI revolutionizing the accounts receivable landscape, digital transformation is no longer an enhancement option but a critical step of your organization’s working capital management strategy.
To help the O2C professionals who are chasing digital change, we are rolling out the “Convincing the C-suite” series of eBooks which would address the complete process from identifying requirements to implementing the automation. This eBook covers the first step, ‘Research & Requirement gathering’ with subsequent steps of the process getting addressed in later editions of the series. Hope you find the eBook worth your time & sign up to receive further editions of this series.

CHAPTER
02

Research & Requirement Gathering

2.1 STAKEHOLDER IDENTIFICATION

Identify all the important stakeholders who are going to be impacted by the digital disruption project and start involving them right from the initial stages of the project. This would allow the respective teams to be prepared for the incoming change, share their perspective on the pros and cons of the change and also provide their share of invaluable contributions to help make the project a grand success. The various parties who need to be involved for a Cash Allocation Automation project include:

IT Teams

Sales Teams

Treasury Team

Customer Service Team

Human Resources Team

Credit Management Teams

Collections Teams

Invoicing/Billing Team

Dispute/Claims Resolution Team

More teams can be added or removed based on company polices & preferences. Once the teams are identified, a board of project members involving representatives from each team should be formed and should meet regularly to discuss updates, issues and arrive at a plan of action.

2.2 HIGH LEVEL REQUIREMENT IDENTIFICATION

This is the phase where all the teams mutually agree, discuss and arrive upon a set of high-level objectives or outcomes which the intended project is expected to achieve. For instance, the sample objectives of a Cash Allocation Automation project could be as below:

Reallocation of resources for high-value tasks

Cost reduction of silos-based solutions

Search for a solution adhering to the existing compliances, policies

Transparency, visibility through proactive reporting mechanism

2.3 PREPARING A REQUEST FOR PROPOSAL

A Request for Proposal (RFP) is a comprehensive list for the vendors to help them understand the precise requirements of the buyer. An incomplete/vague RFP could fuel misconceptions within the vendors. It helps to solicit bids from vendors, acquire all the information which could help you extract the most optimal solution at the lowest price, & ensure a fair & transparent vendor selection process.

2.4 ANATOMY OF AN RFP

Any RFP should cover the below essential sections so that the vendors would be clear about the company they are going to work with, the exact details of the project they would be undertaking & also provide with pricing details which are neither underpriced nor inflated.

a) Company Overview

A company should introduce themselves to the vendor before proceeding to discuss more important items. This section should explain company history, its business model & industry, financial data such as annual revenue, employee strength, geographical presence, types of customers it deals with as well the values it stands for.

b) Project Objectives

The company should provide the vendor with a brief project overview for which the company is inviting bids. This should include details about the process in discussion, the intention to consider the process, current challenges, details about the various stakeholders.

For example, you could describe A/R landscape in short before proceeding to explain the

Cash Allocation team size

Types of payments & remittances to be processed

ERPs into which cash is to be posted

c) Detailed Scope of Work

This is the most critical chapter as it gives the vendor a detailed understanding of the company’s expectations and helps them assess their internal capabilities to match those expectations. An insufficiently defined scope of work might result in the vendors quoting inaccurate prices or promising impractical timelines. For a sample Cash Allocation Automation RFP, please refer to the below sample scope of work.

SAMPLE FOR DETAILED SCOPE OF WORK CASH ALLOCATION AUTOMATION

For Credit and Finance Managers working on RFPs, below is a list of factors which should be considered for Cash Allocation Automation Project RFP.

The scope of work helps companies identify & asses capabilities & deficiencies of different vendors with respect to various functionalities, which they would not have revealed by themselves until the elater stages of evaluation.

Vendors participating in the bidding process are required to reply with a simple YES or NO against the requirement.

The key requirements that should be considered in the project scope

are as follows:

c.1 Payment Capture

Confirm with a Yes/No if your solution can:

Enter cash into ERP in the following formats

BAI, ANSI, EDIFACT

Process excel spreadsheets for credit card payments

Capture payment information from the following payment formats?

BACS, CHAPS, FP, SEPA, Cheques, SWIFT, ACH, Wire

Provide standard interfaces for following payment types

BACS, CHAPS, SEPA, Faster Payments, SWIFT & Wire payments

Generate service charge/interest invoices generated at the time of late payment/end of a particular period

c.2 Remittance Capture

Confirm with a Yes/No if your solution can:

Capture remittance from the following sources:

Paper, emails, customer web portals, EDI, BAI2, MT940

Capture remittance data from email content & attachments in

PDF, Excel, TXT, BAI, EDI820, MT940, MT942, HTML formats

Handle remittances across multiple customers & business units

Process remittance with a one-time setup instead of regular configurations/calibration/programming

c.3 Invoice Capture and Matching

Confirm with a Yes/No if your solution can:

Handle multiple transactions against same line item in same application

Provide tools to extract all data for further processing or reporting & other tools such as BO, Excel, BI, BW

d) Vendor Related Information

The vendor should provide information about their background, previous experience & achievements as well important details of the solution such as solution architecture, integration capabilities, key features, digital brochures, web links, videos, demo links, etc.

e) Pricing Requirements

The company should ask for the cost structure of the solution offered by the vendor. This should include basic package cost, subscription costs, additional enhancement costs.

f) Performance Measurement Standards

The company should clearly define the standards to measure the vendor’s performance such as timeline, security, cost reduction.

g) List Of Deliverables

The company should ask for an implementation plan from the vendor along with other requirements such as ongoing support, blueprint, timelines, methodology.

h) Submission Guidelines

The company should call out the standardised format/ template for each section, as well the timeline to submit. This is to prevent various versions of entries which would make compiling an comparison a nightmare for you.

i) Standards & Classifications

The company should ask the vendor to provide information & validation if the work or product meets the international standards, for example, ISO standards, ERP certifications, GDPR compliances, PCI-DSS compliance.

j) Terms & Conditions

The company should ask the vendor for their IT policies, security measures, legal policies, & their business terms and conditions. This could include password policy, system upgrade policy, data retention policy, privacy policy & confidentiality, project dates, Non-disclosure agreements.

CHAPTER
03

The Next Step After RFP Preparation

After the compilation & comparison of the RFP responses, the next action item is to shortlist the vendors.

CHAPTER
04

About HighRadius

HighRadius is a Fintech enterprise Software-as-a-Service (SaaS) company. The HighRadius Integrated Receivables platform reduces cycle times in the order-to-cash process through automation of receivables and payments across credit, electronic billing and payment processing, cash application, deductions and collections.

HighRadius solutions have a proven track record of optimizing cash flow, reducing days sales outstanding (DSO) and bad debt, and increasing operational efficiency so companies may achieve strong ROI in just a few months